Safaricom PLC’s plans to extend its territories to Kenya’s northern neighbour Ethiopia have been very clear for a while now but the efforts have not been as successful. The Ethiopian government stated last month that it would be impossible for M-PESA to have any space in the market. According to the Ethiopian central bank, no foreign financial institutions would be allowed to offer mobile money services in the country.
Luckily, the firm was offered a window to buy into Ethio Telecom, the country’s monopoly provider whose privatisation process has now begun. This is one opportunity that Safaricom has been waiting on and one that might then grant access to a licence in an economy with more than 100 million people.
The Ethiopian Telecommunication Authority (ECA) issued a statement last week announcing that the country would now be open to selling a 40% stake in the state-owned company. In response, Safaricom and its parent company Vodacom both expressed their interest in buying a stake in Ethio Telecom.
In an interview with Daily Nation, Safaricom CEO, Peter Ndegwa stated that he would pursue opportunities in data, M-Pesa and geographical expansion to Ethiopia as part of his strategy to take the telco to the next level of growth.
The ECA called on not just Safaricom but any other foreign company to show interest in the acquisition of the stake that will lead to the issuance of two nation-wide full-service telecommunication licences.
“The launch of the Expression of Interest (EOI) represents a significant milestone and a major development in the liberalisation of Ethiopia’s telecommunications market,” the statement said in part.
This will mean the end of the State’s monopoly that has now lasted for nearly a century. Other than Safaricom, a number of other African firms like MTN, Orange and Airtel have also expressed interest in access to Ethiopia’s fast-growing mobile phone services market.